ProcurementLawandPolicyInsights

GAO’s Annual Report: Protests Are Down, But Their Effectiveness Is Up

On Monday, GAO issued its Bid Protest Annual Report to Congress for Fiscal Year 2017. Most notably, the effectiveness rate hit 47%. The effectiveness rate looks at all cases filed, and measures the percentage of cases in which a protester obtains some relief, whether through a sustain by GAO or voluntary corrective action by the agency.

That’s right: Protesters obtained relief in almost half of all protests last year. And this year’s 47% effectiveness rate is a new all-time high — continuing a steady upward march over the past several years. When GAO began measuring the sustain rate in 2001, it was just 33%. By 2008, it had risen to 42%. It then held pretty steady through 2012, but has been rising since:

Meanwhile, GAO’s sustain rate looks only at those protests that reach a decision on the merits, and measures the percentage of those protests that are sustained by GAO. This year’s sustain rate dropped to 17%, but for several reasons the sustain rate has always been volatile, reaching as high as 29% and as low as 12% in the last 15 years.

So while this year’s rate of sustains by GAO dipped, the number of voluntary corrective actions went up. And, as a result, protesters’ overall success rate also went up. The 47% effectiveness shows that protests continue to serve an important oversight function: In almost half of all cases, either GAO or the agency itself agrees that there is a problem with the procurement that needs to be fixed.

Also of note, the total number of protests dropped. In recent years, DoD has expressed concerns that the number of protests is spinning out of control and will continue to rise. But GAO’s report reveals that the number of cases filed in Fiscal Year (“FY”) 2017 decreased by 7% from FY 2016. In raw numbers, the number of cases file dropped by almost 200, from 2,789 to 2,596.

It’s true, of course, that GAO’s jurisdiction over civilian task orders of $10 million or more lapsed in the early months of FY 2017, but that only partially explains the overall drop in protests. The number of task order protests dropped only by about 120, from 375 in FY 2016 to 256 in FY 2017. The overall drop in protests is a trend worth watching, particularly given all of the recent discussion about taking steps to reduce their number by penalizing unsuccessful protesters.

GAO also identifies the most prevalent reasons for sustaining protests for each fiscal year. The following chart lists the most prevalent reasons for sustaining protests that GAO reported in FYs 2017, 2016, and 2015:

Although the categories are very limited, the chart provides some guidance to potential protestors on which arguments they may want to pursue when considering a protest at GAO.

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As always, the annual report provides a wealth of other interesting information for the contractor community. In addition, the RAND study of protests commissioned by Congress in last year’s National Defense Authorization Act will likely be issued soon, and that will include a new universe of data about the protest process. We’ll report on that when it arrives, so stay tuned.